I realize that this is a stupid question, but I wanted to make sure I was right about it.

Is Direct Damage from monsters (like Inaba White Rabbit) considered Battle Damage?

-tmanf

If it's damage done through the declaration of an attack, it is considered Battle Damage unless stated otherwise. So far the only card that states any Battle Damage it does is treated as Effect Damage is Gravekeeper's Vassal.

So you CAN use Waboku and direct attacks by Inaba White Rabbit and other Monster's that can attack directly will be reduced to 0.